Hungarians Want Euro Later Rather than Sooner

Hungarian Socialist party President Attila Mesterhazy’s claim that preparations to join the euro could start in less than two years has drawn fire from the ruling Fidesz party, which insists the population doesn’t agree.

Mr. Mesterhazy told The Wall Street Journal last week that Hungary could enter the euro’s anteroom by joining the European Exchange Rate Mechanism 2 on Jan. 1 2015. He said the country could remain flexible about the date of actual euro-zone entry, depending on what shape the euro zone is in by then.

Most European Union members are legally bound to join the euro zone eventually but several countries are committed to staying outside it. Hungary joined the EU in 2004 and doesn’t currently have a target date to adopt the currency. It has already missed several self-imposed deadlines.

Countries intending to join the euro are required to stay in the ERM2 for a minimum of two years, during which the extent of currency devaluation is limited versus the exchange rate fixed against the euro.

Meeting the strict euro entry conditions such as keeping inflation, the budget deficit, public debt and government bond yields within limits demanded by the Maastricht Treaty, would help Hungary “win more with its predictability and credibility… than what we lose by it,” Mr. Mesterhazy said.

The governing Fidesz party, which faces a general election next year, said over the weekend that regardless of Mr. Mesterhazy’s claims, Hungarians aren’t ready for the euro.

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